the following animation is a good example for a case that went from being a small cost optimization project to a complex new product development project in the beginning it was executed in only one department but turned out to be a campaign a wide project the case company is producing microchips in the electronics sector this sector is driven by Moore's law which states that the number of transistors in a dense integrated circuit will double every two years as a consequence these products have a narrow market window with a very short product life cycle to be able
to compete on the market the companies have to run cost optimization projects on a regular basis it all started with the successful microchip alpha which was released in the early 2000s it attracted many clients as it was an innovative product with high performance to be able to compete on the market and to keep their costumers it was decided in 2007 to run a cost optimization project in which the microchip is redesigned to alpha 1 alpha 1 as the successor of alphas fulfills all requirements of the original but has huge problems with robustness in consequence customers
didn't want to switch to alpha 1 in the company had to continue the production of both products at the same time this led to less profits and increased operational costs the main goal of the cost optimization was not only missed but the costs even increased in total consequently it was decided to start the new cost optimization project Bravo in 2012 to avoid making the same mistakes as in alpha the following requirements were explicitly agreed upon before Bravo should be completed as quick as possible and have better performance than alpha 1 on all parameters most importantly
the switch to Bravo should be as smooth as possible and alpha as well as alpha 1 have to be 100% replaced so that their production can be closed down even though this time the requirements were specify well in advance the implementation of the project faced some serious challenges the Bravo project team was not only new and not involved in the alpha projects they also couldn't get any support or documentation files from the Alpha Team in consequence Bravo turned out to be a totally new design instead of a quick cost optimization project on top of that
the marketing department demanded new functionalities to keep Bravo compatible with a new platform the company was developing at this time that's why Bravo Plus was launched this turned out to be a new product development project which involves several other departments on different continents increasing the project's complexity dramatically however these departments didn't have the necessary resources to support Bravo plus sufficiently in addition to that the project manager wasn't experienced enough to handle such complex campaign lis wide projects these shortcomings resulted in a four times longer project period than planned reducing the market window significantly the costs
were way higher than expected and customers had to make huge changes to be able to use Bravo Plus summed up the purpose of the project changed during its execution from an optimization project to a new product development project in combination with a new and unexperienced project team insufficient communication and poor complex city management the project management was not successful at all still the product itself can become a success for the whole company it is just introduced to the market and the success of Bravo Plus could have spin love effects on other projects of the company
and even their share price you
